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Dear Clients and Friends,
Monthly listing supply dropped by 15% in July versus a 7% decline in contracts signed, leading to a slight increase in the market pulse. While this technically suggests a small shift in favor of sellers, we believe it’s more accurate to describe the market as flat since contract activity is a lagging indicator (it normally takes about 10+ business days to execute a contract). As we’ve mentioned previously, many buyers and sellers have been in a prolonged holding pattern waiting for a market ‘bell’ to ring (a.k.a. interest rate cuts) to prompt the beginning of more robust sales activity and an eventual strengthening in prices. July 26th's CPI release and accompanying data showed a marked reduction in the rate of inflation, which, when coupled with FED Chair Jerome Powell’s accompanying statement that rate cuts were likely on the table this September, was the clearest sign to date of that ‘bell’ becoming more imminent. Of course, there will still be ongoing uncertainty surrounding the election, however we view this as an opportunity for smart buyers and sellers to transact while others wait on the sidelines longer than necessary.
The July luxury market (sales of $4+ million) experienced a seasonally expected slowdown, with 85 contracts signed versus 139 the prior month. (To put this in context, over the last 10 years an average of 78 contracts were signed each July.) The Brooklyn market for homes $2M+, interestingly, saw an uptick in contract activity mid-July and an increase in the median asking price to ~$3 million.
Lastly, there was further news in July regarding two upcoming luxury developments, which was particularly noteworthy given the scarcity of super-prime locations still available for large scale luxury residential construction. Related Companies shared preliminary plans to build a new tower at 625 Madison Avenue (58th and Madison) which will rise to ~1,200 feet in height and include a mix of condominiums, retail, and potentially a hotel component. Further Downtown, Atlas Capital Group along with developers Zeckendorf and Baupost secured a $985M (yes, nearly $1BN!) construction loan to advance the vertical progress of two ultra-luxury towers along the Hudson River between Clarkson and Hudson Street in the Hudson Square neighborhood. The final project (slated for completion in 2026/2027) is planned to include over 100 luxury residences along with a separate senior living affordable housing component and will likely set new price records for the neighborhood.
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